Assertion (A): Capital Expenditure is shown in the Balance Sheet. Reason (R): Its benefit is exhausted within the current accounting period. MCQ with Answer and Explanation

Question

Assertion (A): Capital Expenditure is shown in the Balance Sheet. Reason (R): Its benefit is exhausted within the current accounting period.

A. Both A and R are true but R is not the correct explanation of A

B. Both A and R are true and R is the correct explanation of A

C. A is false but R is true

D. A is true but R is false

Answer: Option D

Solution (By JKSSB Mock Tests)

Capital expenditure yields benefits over multiple future periods (hence an asset), making Reason R false. R describes revenue expenditure.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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A firm's assets total ₹10,00,000 and its owner's equity is ₹4,00,000. The firm borrows ₹2,00,000 from a bank. After the borrowing, what is the total liabilities to outsiders?

A. ₹4,00,000

B. ₹10,00,000

C. ₹8,00,000

D. ₹6,00,000

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Correct Answer: Option C

Explanation:
Initially, liabilities = Assets - Equity = 10,00,000 - 4,00,000 = 6,00,000. After borrowing 2,00,000, liabilities become 8,00,000.

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Question #2

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The 'TCS' under GST is collected by:

A. All registered persons

B. Exporters

C. Importers

D. E-commerce operators

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Correct Answer: Option D

Explanation:
E-commerce operators collect TCS at 1% under Section 52.

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Question #3

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The 'Nil-Rated Supply' under GST means:

A. Goods with 0% GST but ITC available

B. Goods with 0% GST and no ITC on inputs (exempt)

C. Non-taxable supplies

D. Zero-rated supplies

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Correct Answer: Option B

Explanation:
Nil-rated supplies are taxed at 0% but no input tax credit is available. Exempt supplies also fall here. Zero-rated (export) allows ITC.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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